Transcription
Okay. And then uh Brent for you, I mean you you know your dollar milkshake theory. I'm not sure if that kind of frames up that perspective. Uh but maybe your argument is that money's primary purpose is to work for governments. I mean, tell tell me how that fits into that.
Yeah. So I think, um, I think largely this topic gets down to what people want versus what actually is. And I stress that point all the time, but I stress it all the time because I think it's really, really important. And the reason I think it's really important is most of the people I interact with, I'm interacting in the financial space, right? The investment space, people's nest eggs, people's retirement, people's, you know, uh their their their assets. And nothing is more important than that than other than maybe their families. And so I think it's really important to deal with reality when you're dealing with other people's money, uh, well, or assets, however we want to define that term. And I think from a philosophical standpoint, I'm probably very much in line with you guys on what I would like money to be. It's just my experience that that's not what it actually is. And I think, this is my opinion, and I know people disagree with me. I think most of history would back me up on that. Um, it's not to say that there hasn't been a time or there couldn't be a time when money was chosen freely by the market and it was entered into in voluntary exchange. I just don't think that that tracks with much of historical record. And so I think, uh, that's the kind of the point that I typically try to get across when I'm talking about, uh, you know, these the these issues.
Okay. Um, so there's a difference of what we think it could be, what we want it to be, and versus what it is. So to your point, it's sort of like made up in our mind, but the government's really going to exert its power over what they want money to be.
Yeah. So I, I'll give you a really good example, and I, and this will tie perfectly in with all of Lynn's work, which, and listen, Lynn's great, and Lynn has done incredible work, and I read her book, Broken Money, and I like the title, Broken Money. I think it's very apropos, but I think it's very apropos from the individual's perspective. I don't think it's necessarily apropos from the issuer's perspective. And so, I think for the most part, money is working for those who issue it. Now, we're kind of getting into an area where it's not working as well as it once was, and perhaps we're going to have some changes as a result. Um, but I think often times when people talk about this issue, they talk about it from the individual's perspective and what would be good for the individual. And that's great and I love that and I would love a world where that was the case. I just don't think that that's typically the way it actually is. It kind of goes back to my first point.
All right, Lynn.
Yeah, I think so. A couple points. One is we can separate this over time, right? And so, uh, before the fiat age, uh, most most governments around the world, most most uh kingdoms or, you know, empires or whatever the the political structure is at a given time, most of them had to tie their money to something of external value like gold, silver, or other types of um commodity monies, uh, because they had, you know, a limited ability to just impose something that's entirely artificial over a public over a long period of time. Uh, generally speaking, experiments that just totally deviated from that, uh, like like paper money in early China, uh, didn't last super long. Uh, and while there was seigniorage and there was debasement, you know, a lot of people reading this, watching this, probably familiar with like the long-term chart of like Roman currency debasement. Uh, it's important to remember that was over like a two-century period. Um, there was generally, it was, there were more frictions against debasement because of what they were working with at the time. One of the things I point out in Broken Money is that in the, uh, the invention of telecommunications. So starting with the telegraph and of course expanding from there, uh, that opened a really big speed arbitrage, uh, which gave banks and governments a lot of power, uh, to really shift things in their favor. And I agree with Brent that, um, you know, there's a difference between the user of the money and the issuer of money. I even touch on that in Broken Money where I, I have a page or so dedicated to the issuer's perspective versus the user's perspective. Um, and so that part I don't disagree with, other than to say that we've finally reached a technological point, uh, where there's actually some way to combat that. Um, so you had this kind of century and a half period where transactions could move at the speed of light, but there's really no way to do final settlement, uh, at that speed. And so we were relying on these big centralized ledgers to kind of fill the gap. Uh, and the invention of Bitcoin opens that back up. And then of course, you're, you're then you're bootstrapping from zero, right? Some some small team or guy on the internet in 2009. Uh, that takes, you know, years or decades to ramp up to have, you know, significant scale liquidity, uh, you know, durability, and and just overall functionality and an app system building on top of it. Uh, but for the first time in history, there's actually alternatives that can move just as quickly. Uh, and so while it is still certainly the case that, you know, out of 180 or so currencies around the world, all these little local monopolies, uh, you know, the issuers are doing that for a reason. They're, they're extracting value from it. Um, but, you know, there are ways around it now. And this whole debate started about the the topic of whether or not Bitcoin is money, uh, or has monetary aspects. Uh, and so I think that while I, I fully agree that it's important to acknowledge reality, it's also important to acknowledge that that details of reality shift over time, especially with technology. That's kind of a persistent global shift over time, as well as, of course, politics and other things that lay on top of it.
Yeah, go ahead and jump in, Brent. You guys can just.
Well, so I, I think she, she's again, she's right. If you go back throughout history, there were periods of time where, you know, sovereigns, kings, queens, whoever, you know, governments tied their money to something of value. But there's no, or there's not no, but there's very little evidence, anthropological evidence, you know, written evidence that, you know, barter ever existed on any large scale. And in fact, if you go way back and you actually look at the written history, most times the written history, now it's not to say that there couldn't be something before history, before written history where they did barter, but if you go back to the historical records, most of it is written down and it's that which is written down shows that money was a form of debt and it started off as keeping track of who owed who what. So again, we get back to a ledger, right? There's no evidence that that original ledger had to be tied to gold. It's not that it couldn't be, but there's no evidence that says that is the case. Now, I, I actually like the idea of this. Um, but when I've done the research to actually find the evidence, I can't find it. So, if you can find the evidence that shows that money was derived from something of value and then the kings or queens or sovereigns adopted it, I'm open to that. But that's just not the historical information that I have found. But there's plenty of information arguing the other way saying that it was actually a system of credits, a system of debts, and that was very, and that was kind of imposed by the sovereign. That was why that was the way the sovereign provisioned for themsself. Now perhaps it wasn't an organized government like we think it is now. But if you go back to, you know, the whole clan of the cave bear or whatever it was, you know, the biggest strongest guy kind of said this is the way things are going to be. And there is evidence that that is the case. But there's not a lot of evidence that, you know, we traded fish for goats and then goats for, you know, strips of leather and then strips of leather for shoes and d. Uh, it's a nice way of explaining things and it's a nice way to talk about how things could have developed in a free market where there wasn't an imposition from some big mean guy or girl, you know, dictating to us how to act. But the historical record just doesn't back it up. And so, but, and, and so that, that it's, we kind of get into a little philosophical thing of here is money what the what the sovereign demands? Is it the token demanded by the sovereign, um, in the form of tribute, or is it the most marketable commodity that is chosen by free individuals? I certainly like the second one a lot better. I just haven't found a lot of evidence to support it.
Well, I think we need more nuance than that. I mean, one thing I'd point out is that in the first part of Broken Money, uh, I had a whole section devoted to kind of undermining the the, you know, the barter concept. So I would agree with you there that basically that that if anything, you know, social credit was right alongside, uh, any sort of usage of of physical monies. Um, but one, one additional nuance we can put because we can go back earlier than a something like a sovereign, uh, is that basically that that social credit would be used in fairly small groups, uh, because it's only as good as to to the extent that you either know the person and they're reputationally enforcing, you know, their their debts and credits, or a small enough kind of tight, you know, uh, uh, jury, like, uh, someone who can adjure and say that, you know, this this agreement is valid. Um, uh, and so, but once you get to a point where you're trading with people you don't know, uh, that's where the kind of the informal credit system breaks down. Uh, you either need a larger system of communication and and banks, which came later, um, or they, that's where they would fall back on something more physical. And so there's early evidence and and also kind of, uh, more recent hunter-gatherer, uh, evidence of things like beads being used as money. Uh, there are certain things that would emerge before gold even, uh, where combined with social credit, they'd be used as a form of liquid or final settlement, uh, that is not relying on the ongoing obligation. And then when we look back at like the earlier records, uh, that we have, like some of the earliest forms of writing, you know, like in in Babylon, even then, the the sovereign's money was was tied to something of physical value, uh, things like grains, things like silver, uh, and so, but that, that of course came later, uh, than the whole, you know, Paleolithic period. Um, so I'm right there with you that money goes back to social credit, at least alongside commodities. Maybe not instead of it, but but alongside it. Uh, but it's not, it's not like it merely originated as a tool of the sovereign, because all of this discussion even pre-existed something like an actual sovereign, uh, in in small social groups, as well as just between groups that otherwise don't know each other. So even then, money is a superset of just, uh, a form of control or form of, um, you know, issuance of a sovereign. It's something that emerges, but then also at times is imposed, uh, depending on the region. But even when it's imposed, it often has to have some tether to reality. Uh, otherwise, it's, it's generally not very long-lasting. It's easy to disrupt. It's, it's so easy to game that it just goes away and they have to start fresh with something that's more tied to reality.
Lynn, would you also say that, you know, sort of going back predating, um, the sovereign, as you said, sort of pale paleolithic, um, origins, um, they used a form, different forms of money to sort of help with the trade barrier. And maybe the sovereigns also used a form of money, but then maybe to better coordinate the trade within their kingdom. Maybe starting out, uh, wanting to help trade in the beginning, maybe moving to more control later when they found out they could debase the currency or something like that.
Yeah. Well, there are early technologies that are so basic that we don't consider them technologies today. Uh, so things like bills of exchange on papyrus and then later on paper. Uh, things like coinage. So instead of, you know, like sorting out, uh, you know, silver dust or something when you're trying to trade with someone, or little chunks of like irregular chunks of silver in exchange for something, uh, anything that kind of unifies, uh, or or or, you know, greases the transaction speed, uh, ahead of time is useful. So, so coinage with, you know, a preset amount of metal, maybe ridges around the edge to prevent shaving, or some sort of like stamp on it to kind of, um, you know, make it harder to, uh, falsely reproduce. Uh, these were early technologies. Uh, and then later things like, uh, the printing press would would dramatically reduce the cost of these paper instruments that could be used as proxies. Uh, so, yeah, a lot of these things developed because they solved actual problems that people had. Uh, and then those running a system, uh, you know, quickly find that they can game it. Uh, they can, you know, uh, make a coin that's 90% gold or silver. Uh, but then when the when they have trouble, uh, doing the finances, um, you know, and they, they, if they tax too much, the the people get angry. Uh, they don't spend enough, the people get angry. Uh, or they want to do a war that's not very popular. Um, then as they get tax revenue, they can remelt the coins and make them, you know, 80% gold or silver, spend more back in. Initially, they they benefit from the Cantillon effect. So the initial spending, the soldiers' salaries and so forth, uh, are still kind of treated the same way. The government basically spends, uh, more than they taxed. And then as that increased money circulates more and more, there's, you know, supply demand mismatches, uh, and prices start to go up after the government already got their full worth from spending it. Uh, and so these kind of exist as error corrections over time. Uh, now, there are there are some times where someone just sets out from the beginning and decides, I'm going to steal people's value secretly. Uh, but, but it usually is a little bit more, I would say, discreet than that, which is a combination of solving a problem, but then, uh, you know, using the error correction in your favor, basically.
Brandon, go ahead, what do you have?
Well, again, I, I, I think we could probably sit here and talk about this stuff and agree on 90% of it. It, I, I think the interesting stuff gets into the 10% where where we disagree. Um, and that is that the biggest tool that any government has against their citizens is violence. Right? They have a monopoly on violence. That's why it's illegal to, you know, walk up and hit somebody else in the head with a two by four. Right? Now, if they do it, they have a way of justifying it and it's for the greater good and they have all these reasonings behind it, but they want to be the monopoly power on that. So, that is their number one tool to get the populace to do what they want. And then they tell stories about, you know, we do it on your behalf and all this kind of stuff. But at the end of the day, it's a power structure. The second biggest tool that they have to get people to do what they want is money. And in some ways, they can provide positive incentives to get people to do what they want, and in other cases, they can impose duties to get what they want. But the idea that the sovereign would who has a monopoly on violence would lay down their power to the citizens because the citizens have money of their own. I think that is a little bit of a contradiction if you understand power structures to begin with, right? If I have the power to walk over and take your gold from you or your Bitcoin from you or whatever it is, why on earth would I stay subservient to you if I didn't like you and you were trying to get me to do something because you had the money and I didn't? So, to me, it's very, very hard to separate the two. It's very hard. It's not impossible. And if we had benevolent leaders and altruistic politicians and kings and all these things, it's not that it isn't possible. It just for me doesn't square with reality. And because it doesn't square with reality and because I think it's very hard to separate money from power, I, I, this is why I fall back on whether something is money or whether it is not money. I fully admit that Bitcoin could be money, seashells could be money, gold could be money, but I don't think any of those are right now. They have many qualities that would make them an excellent type of money, and they have many qualities that would be very advantageous to the individual if they were money. But then we get back to the power structure again, is why would those in power want to give an advantage to those they are trying to subject? And it just, I, I, I can't get there. I mean, just because I, I don't think that I, I don't think those who give up power remain in power for very long, and those who have ever had power very rarely like to give it up. And so I have a hard time seeing a government instituting or issuing a currency or a money or accepting a money which they cannot control or that they don't have some control over. Now, maybe they don't have to have full control. Maybe they don't have to have a perfect system that they get all the advantages and the individual gets no advantages. But I think if you, on on the scales, I think money is always going to advantage the sovereign versus the individual. Now, there are some big advantages to giving some advantages to the individual. If you can convince people that they are working for themselves and they are making money for themselves and they get to keep some of the spoils, and as a result, they get to have certain advantages over some of the other citizens, then those people may work harder and provision the government better and all these types of things, and and you get into a system which is much more efficient, much more productive. The workers are happier, but just, but, but it's still a power structure, even under that scenario, it is still a power structure. And I think if you ever get to a point where the citizens have more power than the government, the government is not going to last very long. Now, the big, big, big, uh, exception to this rule is the United States of America. Right? I don't think people realize when they hear the word, the American experiment or the experiment with democracy. I don't think that people have a a proper appreciation for how unique in history this actually was. It's the first time in history that the legal document talking about the government set rules out for what the government could do rather than what the citizens could do. And, you know, a big part of that was money, right? And that's why initially there wasn't a, you know, uh, fiat currency, um, in in the US. And so, I, I'm probably just kind of rambling here at this point, but, but to me, it's, it's very important to to to get the point across that it's not that we can't have a great system where money benefits the individual. It's not that we've never had one. But I think the idea that we are going to have a fully functioning government and a money that works for the people rather than the government is a beautiful, beautiful dream. But I just have a hard time seeing it implemented in reality. I want to pass that to Lynn, obviously, but, uh, just to summarize that. So the problem that you see is is potentially maybe we've had the free money in the past. The governments now have control of it. And number one, you see a hard time where they would ever give up control. They have a monopoly on violence. So what they would do almost anything to maintain that control. And then potentially even if they were able to lose control, we see governments lose control over their money quite regularly. If they were to lose control over that, they would probably enact another system to take control back again.
Yeah, that that perfect.
And then you might say that the technology might have changed that. I think that's what you argued earlier. Um, so go ahead and see what you say about that.
Yeah, I would argue that shifting technology changes, uh, where the power lies, or maybe more specifically, how much power is concentrated, uh, because there's certain asymmetry, asymmetries that form and then go away. So we can examine those claims kind of around the margins. One is that there are existence of smaller countries that get dollarized. Uh, so basically their currency is is either one so mismanaged that basically people have no choice but to default to something else, and the government really kind of loses its ability to say, stop using other monies, only use our monies, because it's so unworkable, or in some cases, there are politicians that come up and say, you know, we manage the currency so bad, we're just going to stick with basically the dollar, or whatever the case may be. Um, and so around the margins, there are already places that do that. Uh, and then there are, there are even, uh, wealthy countries. I mean, there there are certain parts of Switzerland that accept Bitcoin as tax, for example. Uh, you can pay your taxes with it. Uh, and otherwise, it, it, it's endorsed. Um, so around the margins, we, we know that that, you know, while it is true that most governments will do their best to impose a currency, it's not unheard of for it not to be the case. In addition, you know, we exist right now in like a 54-year period of of global fiat currency. Uh, and so before then, there is some sort of tether to to precious metals, mainly gold. Uh, and we don't know what the future is going to look like another 50 years from now. Uh, so this experiment, uh, that we currently exist in is still relatively new. And of course, every generation kind of reorients around the current reality. So now it's like, well, how could, how could currencies not just, how could countries not entirely have their own currency? That's just how things are now. Almost every single country has one, and even countries that don't have one, the handful of them use some other country's, uh, larger country's fiat currency. Uh, but again, that's, that's, you know, we, we exist in, you know, uh, this 150-year kind of speed mismatch where the telecom era that that totally reset the board. Uh, and then really only in the past third of that century and a half era, so really the past 50 years have reentered the full law and kind of ramifications of that era, which is the fiat currency era that we currently have now, where even when a currency fails, people rarely fall back to gold because gold is so slow and and has all these divisibility issues. So they generally fall back, ironically, to a larger fiat currency that's still functioning. Uh, and another thing that's worth pointing out is, I mean, the, the, you can go on Twitter and find all these debates where they would say, if Bitcoin gets big enough, the governments are going to ban it. And of course, there have been some governments that either try to ban it or restrict it or surveil it. It's still very popular, uh, to even ones that allowed it. Uh, and yet, it's important to remember that government is not a monolith, at least in most cases, as long as as long as you're not in North Korea or some other, um, cases. Uh, the generally speaking, that the places we're talking about, um, government is not a monolith. Every, you know, every generation or so that there's rotations that occur. There's some, you know, while not everyone has the divisions of power that America has, many countries have some degree of divisions of power, either independent courts or multiple, um, legislative bodies, and basically limits on any sort of centralized power. Uh, in addition, power is generally easier to wield when you get the public, at least mostly on your side. Uh, it's kind of like plausible deniability. Um, whereas it's harder to do when you fully take the mask off and just say, we're, we're against the people now. Uh, it's, it's often, for example, power is often taken in moments of fear where you promise people security in exchange for some of their freedom. Uh, or you say, what we talked about earlier, we're solving a problem for you. Hey, sometimes you don't solve that problem perfectly, but, you know, we're only human and we're just kind of grifting off the off the side of it while we do it. But people still generally believe that that things are being operated better than if there was no one. Uh, whereas if you just come to them and say, uh, you know, we're going to reduce your freedoms because we want to, or because it's in our interest, that's when you're more likely to get widespread protests and things like that. Uh, and so, uh, one of the things that Bitcoin does is it's, it's basically a decentralized Excel spreadsheet, more or less, that's backed up by, you know, various forms of of distributed, uh, consensus that allow that to function for so long. Uh, and governments have now grappled with this thing for 16 years. Um, people said that they'd ban it, and again, some have, but now we have a president, for example, that in his first term was pretty opposed to it. Uh, now he, you know, endorses it. Maybe not, maybe he's not fully philosophically aligned, uh, with Bitcoin proponents around the world, but he, he's kind of recognized the usefulness of it. I think there's pretty clear game theory here where like people that were in kind of the Elizabeth Warren camp, uh, that were, you know, kind of basing their identities or their their brand around being anti-crypto or anti-Bitcoin. There's no money in that. Uh, whereas there's more money in supporting the candidates that would, you know, at least allow marginal freedom, uh, to keep interacting with it. In addition, and this is my last point for this, this kind of part, uh, when we back up, there's like this global chessboard where even when, uh, you know, politicians in a country are trying to impose things locally, they're still competing with other regions. And again, if you're not North Korea, then there's some degree of like mobility going on in most cases. Uh, capital, uh, often doesn't want to go to places where capital is not respected. Uh, brain drain happens where, you know, people that that have capability or means try to leave places that are that are not conducive for them, and and that other places are happy to have because they, they can benefit their economy. Uh, and so in a lot of countries, it's in their best interest to say, you know, we're, we're still going to have our own currency as far as we can allow, we can get away with it. Uh, we're going to try to surveil things to to some extent, uh, but we're not just going to go fully mask off and just, you know, kind of impose arbitrary restrictions because we want to be seen as a reasonable actor on the global stage where capital and people want to be, and and Bitcoin benefits from that kind of global arbitrage that happens where if, if one place decides to, you know, get all authoritarian, another place can say, well, we're going to, we're going to, you know, allow more freedom, and that's, there's already hubs around the world where it's been endorsed in some capacity, and they ebb and flow over time. Uh, but there's plenty of footholds. And then, you know, we've already seen this for decades with the dollar, which is that the dollar finds its way into all these different little currency monopolies. Uh, the leaders aren't always thrilled about it, um, but there's generally only so much they can do without going 100% mask off. And if they go 100% mask off, they often start losing, you know, the support of the people, which gets hard to maintain longer term.
Yeah, great point. So, you know, Brent, you used a historical narrative and Lynn says that technology changes things and so now we have this technology and to your point about the dollar sort of finding its way into these countries. Um, you add in the US dollar stablecoin, which is a new technology to empower the dollar. It's finding its way in even even further now. Um, do you have any points to counter on that or we can go to.
I think, uh, no, a couple things and again, Lynn makes great points. One point I would add on, uh, to what she said, because I, I don't disagree with what she said, is that part of the reason, in my opinion, that governments have not come out and forcefully challenged Bitcoin in in in in a big way is because so far, Bitcoin has not challenged the sovereignty of the dollar or most other fiat currencies. Um, I think this is probably the the point where we started to disagree on on on the Twitter exchange was in my opinion, and I, I think you guys disagree with me on this, is that Bitcoin has changed its narrative from a medium of exchange to a store of value. And I think it's, I think it is because of that narrative change and because it's not widely used as a medium of exchange. It is used. There are places you can use it, and if you're really creative and thoughtful and plan out ahead, you can use it in many different places, but it, Bitcoin is not a widely accepted general medium of exchange. If it was, then I think the government, not only the United States, but governments of the rest of the world would have a bigger problem with it. But as it is now, it's an asset, and it's an asset that has gone up in price a lot, and as a result, it's created a tremendous amount of wealth and it's generated a lot of technological innovation around that space. And some of that technological innovation around that space, I would argue, is being adopted by the United States government to even further cement the US dollar as the global reserve currency rather than have it challenged. Um, so I don't know if you know you want to come back to that or not, but that, that, that would be the points I would, uh, you know, make on on Lynn's comments.
I would say that Bitcoin didn't change its narrative. I mean, from the beginning, there were people pointing out its store of value properties and its medium of exchange properties. It's been used as both from the beginning, uh, you know, and, um, I actually had a recent article on this, which is to say that, you know, people often, they separate, again, this is time dependent, so they'll say, you know, because in its first 16 years of existence, bootstrapping from zero up to now, a two plus trillion dollar asset, to say it's, it's not money because it's not ubiquitous exchange. Well, in the global sense, in order for it to be ubiquitous exchange, uh, it would only have to be like 10 times bigger than it is now. It's a $2 trillion asset. Uh, and one of the points I made in our, in our thread, in our Twitter thread was, it's already better portable liquid capital than, you know, I would say 170 out of the 180 fiat currencies out there, right? So the Egyptian pound is worse money in New Jersey, I would say, than Bitcoin is. Meaning that it's harder for me to spend Egyptian pounds than Bitcoin. Uh, and that's not just because Egyp, Egypt is a developing country, because it's similarly hard for me to spend Norwegian currency in New Jersey. It, it happens to be a small wealthy country, you know, no network effect that extends here. Uh, and so when you think of assets you could bring globally that have monetary aspects, uh, Bitcoin is very high on the list. Physical dollars are high on the list. Gold coins, silver coins are high on the list. Bitcoin's high on the list. A couple other currencies like euros or pounds are are reasonably high on the list. Uh, and it drops off really quickly after that. There are certain assets, uh, like a, you know, a money painting, or even Apple stock, that have virtually no utility as money, uh, either because they lack divisibility and liquidity, uh, in a, in a painting's case, or as as Apple stock, it's very hard to actually give it to someone else until, ironically, it's, it's, you know, tokenized in a more recent, uh, time period, but before tokenization, there's no way to meet to to transfer Apple stock to someone else, and even then, um, you know, it have all sorts of frictions and it would rely on a chain of credit. And now we exist in a time where, you know, there's a spectrum of how, how much monetary aspect something has. So something that's like a painting has basically zero monetary value other than this a liquid store value that can be self-custodied. Uh, you know, company stock is also not very monetized. Uh, real estate is not very monetized in the sense that there's very little capability to actually use that to exchange value. But when you go toward things like silver coins, gold coins, uh, or Bitcoin, um, then it starts having pretty significant monetary properties. And even though there's no country where there's enough density, like a top-down monopoly, uh, so far, at least in the first 16 years, uh, it still ranks pretty high globally for places you could, you could use it. Uh, and, and I'm not sure if I assume Mark has has bought and sold things in Bitcoin. I, I have. There's multiple countries where I've, I've bought things, uh, using Bitcoin. Uh, and in addition to to avoid the irony, uh, I sell Broken Money in Bitcoin, uh, at least as as one of my distributor options, uh, to avoid the joke that, you know, you only sell broken money for broken money. Uh, and, uh, so, uh, we've had significant sales globally, uh, uh, of of my book in Bitcoin. Um, you know, there's not been really any requests to for people to buy it in gold or silver. And there's really obviously, there's, it's hard to do that online. Um, there are some credit ways to do it. Um, but there was demand and requests for people that want to buy it in Bitcoin. So we met that. And then, you know, when I receive that Bitcoin, I hold it. It's not something I immediately sell for something else. I, I hold it. And so we can debate like philosophically, what is money? Um, but, you know, the, the, the few things that I've used in my life for money are one, fiat currencies because I'm born in this era, and two, Bitcoin.
Well, so.
I want to give I want to give Brent a chance because I know this is the disagreement part. I do want to just say last summer I did take my family over to Europe and we spent, um, about a month going through Italy and and Greece. And as I walked around all the streets there and all the major cities and as walking by all the money changers that are there, lots of them had Bitcoin listed, um, along with the other currencies that they convert. So I didn't see gold accepted there, but I did see Bitcoin acceptable for the other currency exchanges. But anyway, go ahead.
Yeah.
Well, so my, I guess this is a question maybe for each of you, is because this is the part I don't quite get. And, and by the way, I do have this same conversation with my friends in the gold world. So, this is not exclusive to Bitcoin, but why is it so important for Bitcoin to be considered money? Why can't it just be a highly liquid, globally accepted asset? What is the, what is the strong affinity and almost to me, when I say Bitcoin isn't money, the amount of people that come after me so zealously is is something to behold. And I don't quite understand why, because it doesn't, something doesn't have to be money in order to be an incredibly valuable asset. So what is the, I don't want to call it obsession, because that that'll probably trigger people, but what is it that that do you think the industry so much wants Bitcoin to be considered money? I would actually argue it would be better for the industry if you guys didn't advertise it as money and just advertised it as a store of value or an asset, because then you're going to be less likely to run into regulatory hurdles or challenges from legal authorities. So I get this is a question for me, like, what, what is it about it needing to be money that you think is so ubiquitous within the industry?
Well, there are there are some Bitcoin proponents that use that same line of reasoning and say we shouldn't call it money, we should call it something else. Uh, and there are other other Bitcoin proponents that would disagree with them. Uh, I, I think that it's important to separate whether or not something has the functionality of money versus whether or not it's currently used widely as money at the current time. So, for example, fine art, uh, even regards to whether people are using it as money, there's no world where it could be used as money, at least without abstraction and credit, things like that. Uh, it just, the, the physical properties aren't there. You know, there's a reason why gold and silver evolved as money and, you know, most other things did not, uh, because they actually have intrinsic attributes that make them better monies than other things. Uh, and so Bitcoin was first of all, it was designed to have monetary aspects, and two, it, it does have monetary aspects. Now, again, it's bootstrapping from literally zero. There's no top-down enforcement, uh, in the world to to make people do it as money. So it's, it's just purely, uh, cross-border, kind of global thing that that competes with those other top monies, uh, as kind of portable capital. Uh, I've generally argued that medium of exchange usage, at least at a wide scale, would take a very long time, and that right now, basically what it is, is portable capital for for the VA, you know, for for the most of its value, which is to say, it's, it's capital that you can hold that's liquid, uh, rather fungible, uh, and that you can pretty safely self-custody and bring globally, uh, in many aspects, uh, which is a very novel aspect. And then you can find ways in those jurisdictions, you know, you can't always buy your burrito with it, but you can usually find someone to to, you know, exchange with you with liquid, uh, capacity, and then go out and buy the burrito, whatever the local, you know, casino token is for that particular jurisdiction, because that's kind of what fiat currencies are. They're these little tokens that are issued by the local, uh, authority. Uh, now, but because Bitcoin has these attributes, uh, it actually also can directly be used as money, uh, which is harder for gold and silver in the modern time. Uh, and so it's, I think one is people argue that it, it has the, the, the physical capability to be used as money. Uh, there's the base layer, there's Lightning on top of it. There's Cash now that's built on top of that. Of course, people can also exchange, you know, collateralized credit representing Bitcoin if they want to. There's this kind of full stack ecosystem that allows it to be used, uh, as money in various forms. But again, it's up against a very strong network effect. And then, you know, often the Venn diagram of people saying it's not money, and people saying that it has no value or shouldn't be held, there's a lot of overlap in that Venn diagram. Not, not a, you know, not a 100%, because again, there are people, uh, that like Bitcoin as an investment, uh, that don't like to call it as money, or or, you know, either either philosophically don't believe it, or think it's more convenient not to label it like that. But often the, the claim that it's not good money is used by people saying that it has no value. They're saying, well, it, why not use something else to store value? Why not do other this, because Bitcoin's failing in that one regard. But I would point out Bitcoin is the most liquid, you know, uh, divisible, fungible asset that you can bring with you globally, uh, at scale, which is much harder to do with other investments. Much harder to do even with with physical currencies or precious metals of other types. And so it has these monetary aspects, and over time, uh, it can get, as it gets larger and more understood and more liquid and more ubiquitous, it can keep inching up. So, I, I would agree with all of that, and again, if that's the way it was generally presented with the people I interact with, I would accept that, but I.
Well, we can't speak, we can't speak for everybody here.
No, no, no, I know, but, but you guys know what I'm talking about as well. I mean, just go back to our thread and and and look at it. Um, if someone were to say, Bitcoin is a fantastic asset. It's portable. It's liquid. It's why, you know, it's a, it's been a fantastic store of value, and I think one day it has the potential to become money. I probably wouldn't argue to a whole lot, right? Other than.
What would you say, what, Brent, what would you say the definition of money is and where Bitcoin fails, and even though as Lynn pointed out, has all the right attributes and is on that evolutionary path, you seem to think it's short of. So what is your definition and where does Bitcoin fall short there?
Yeah. So, first of all, I will say I think it is on the evolutionary path, but, you know, I'm on the evolutionary path to being a very good-looking older gentleman, but, you know, I'm just not there yet, right? So, you know, it's just, you know, so it's not that it can't be, it's just that it's not. And and and so what I would say money was, um, is that money is the most marketable commodity and the extinguisher of debt. And I don't think that Bitcoin is the most marketable commodity, and I don't think what it extinguishes debt. Now, if you happen to borrow Bitcoin from somebody and you return it to them and that extinguishes that debt, then perhaps it can be the extinguisher of debt, but it's not a widely accepted extinguisher of debt. And this kind of gets back to my original point that money is very often and in my opinion, almost inseparable, not impossible, very close, very, very hard to separate from the state or the the imposition of the state, right? And the way that you extinguish your obligation to the state, whether you like it or not, is to pay them their tribute or their tax or however you want to define that. Now, Lynn pointed out a rather unique possibility to do this in a certain place in Switzerland, and I, I'm sure she's correct, but that's not a widely accepted way to extinguish your debt to the state, right? And if it was, um, then I would probably be much closer to accepting Bitcoin as money. And again, I, to me, it's like saying, you know, a racehorse is a fantastic asset, but it's not a Ferrari, right? It's just not. It's there, there is a difference. And and I don't understand why it has to be considered money. I don't, I don't see, I, I still, and by the way, and I'll go back to let's go back to gold on this, too. I don't understand the people in the gold world, their obsession with saying that gold is money. Uh, because in a perfect utopian society where there was no government and it was again, everybody enters into free exchange, I think gold would make a fantastic.
Form of money, and I think it very likely would be money, but I just don't think that's the world we live in. Again, it would be like me saying, you know, I have a 50-inch vertical jump, but when my son asks me why I can't dunk the basketball, I say, well, we just haven't moved to the moon yet, right? Right? When we're on the moon, then I'm going to be able to dunk pretty easily. But that's just not the way it is.
And so, you know, I I may maybe we're talking semantics here, but I I just don't understand why I I think I do understand it. I think it's because people are rebelling against sovereign rule, right? Especially with the state of the world, and so that they just don't want to accept it. I think it just falls down to semantics. As Lynn made the case, it has the money attributes as you've used accepted. There's this evolutionary path. It's pretty much there, and it really comes down to a couple nitpicky things, and I would say I I don't want to speak on behalf of the Bitcoin community, as you're saying. Uh, but I think it just fits our definition of money, and so we say that, um, I think most Bitcoiners don't really care what the government thinks about it. That's the whole point we have Bitcoin. So we're not looking for any official definition.
Well, they used to not, but now they do.
Right. I I want to move on, uh, to be to be, uh, respectful of everybody's time here. I have one more topic that I want to get through, and that is the the last topic is about the difference, or maybe the competition, or the fight over individual freedom versus systemic stability. And so I think one of the things that you think there, uh, Brent, is that, you know, the dollar is part of that systemic liberty, and you've made the case that it's sort of against maybe the best interest of the individual, and so we have to sort of balance that. And I think Lynn would argue in Broken Money that the store of money is one of freedom, or the story of money, I should say, is one of freedom versus control. But then Brent, you're saying that governments use the dollar for stability and control. So, Brent, maybe you want to explain your side of that that balance of freedom versus systemic stability.
Yeah, I I think I think if you look back across all of history, the times where individuals had freedom to do what they wanted was a pretty small subset of that overall timeline. It's not that that freedoms didn't exist, and there wasn't some degree of freedom, but I would argue that the last 50, 60, 100 years has has has warped our understanding of what history has been. For much of history, individuals didn't have a lot of freedoms. Again, this experience experiment with democracy that the United States has gone through is pretty unique in history. And so the idea that if if if for much of that history individual freedoms were not as great as they are now, it's hard for me to understand how then they also had all this freedom to just choose whatever they money they wanted to choose. To again, to me, that's that's that that's a that's a contradiction. Um, again, I'm open to being shown where I'm wrong here, but I to me, that's a contradiction.
Um, I I should also say, if you are a proponent of Bitcoin because you think it is the best way to fight for the indivi the rights of the individual, then I applaud you. I think it's a worthy goal. I think it is a fantastic objective, and if successful, I would applaud everybody involved in it. So, it's not that I disagree with the idea of it, and it's not that I disagree with the, um, you know, the attributes associated with it, but to me, it just doesn't square, um, with with the historical record. Um, I would very much like to see it, but I again, I I I I haven't seen that happen.
The the other thing I would say is my guess is that whatever comes next, we're kind of in this time period where I I think part of the reason gold has done pretty well the last couple years, Bitcoin has done fantastically well. Uh, I I the best performing asset in history, you know, by most measures, um, is because we are kind of coming into a period where the money is not working as well as it was, and that, you know, going back to to Lynn's book, Broken Money, and I think we're getting into this period where a lot of people who maybe 50, 60 years ago would not have recognized the problems with fiat money or with money issued by the government are now starting to to recognize. Right. And so I think in some ways they're planning for what comes next. And I I think I don't know, and I'm open to being wrong. I think what comes next is probably rather than more decentralization of money, probably more centralization of money, and rather than more freedoms for the individual, probably less freedoms for the individual. Now, this is not what I want. Let's be clear. It's not what I'm hoping for. Uh, it's just that's where I see the pendulum swinging. And if we are going to have for for governments to keep control, I think they are going to have to impose more control. And that makes it very hard for me to then also accept that they are going to at the same time allow more freedom of choice around what quote unquote money is.
I think a big pushback I would point out there is that options are important. So generally speaking, when a government sees that there's zero risk for doing what it's going to do, it'll keep doing it. It'll keep doing more of it. Um, if basically if the if the whole population is just unilaterally disarmed, for example, in in multiple capacities, um, then the government basically has no check against it. Uh, the introduction of abilities to push back on it, right? So in the United States, people talk about the the Second Amendment that way, but then even in the in the other types of armament, it's tools. It's it's Bitcoin. It's also things like, you know, communication processes. Uh, you know, there's a reason in if you read the Communist Manifesto when they talk about how to implement their communism, they wanted to centralize all money and communication, because they they correctly view that as a challenge to what they want to do. Uh, and so things that provide decentralized alternatives that exist and that are robust, uh, make it pretty hard for them to have a complete monopoly over those things. Monopoly over communication, monopoly over, uh, everybody has to use the same ledger, and there's no leakage toward these alternative ledgers. The fact that these other things exist kind of keeps them some degree honest. Uh, and we can look at other, again, other other countries as examples of this. So because the dollar is something that exists, uh, it it it kind of holds a lot of other fiat currencies partially in check. Uh, and so, for example, in Egypt, when their inflation is out of control, people will, uh, go on the gray market or black market, whatever it is, and they'll, they'll buy physical dollars, um, uh, outside of what the what Egyptian government's saying the official exchange rate is, and they'll do it. They'll also do it with gold. Um, and then they do it less liquid things like like real estate. Uh, in Nigeria, um, they'll do it. It's a little more tech savvy. They'll do it with Bitcoin and stable coins, uh, and things like that. Uh, and so, uh, you know, any any time where the tools are available, and then importantly, they're also, you know, people are familiar with and and able to use the tools, they know about the tools, they communicate the tools to other people, these represent organized push back, and it makes it harder for the government, uh, you know, kind of malicious government to do what they want to do if it's not popular. Uh, and so that's one that's that's why things like education, uh, on on the tools matter. That's why developing those tools make sense. Uh, and and, you know, that's one of the reasons I mean, I I do venture capital in the Bitcoin space to help build those tools. Uh, in many cases, I I also donate to organizations without, you know, there's no return from that, just because I think it's good to exist.
So rather than say talking about what I'd want to exist versus what does exist, I think it's important to acknowledge what exists, acknowledge the tools that, you know, for example, the state has in this case. They do have a lot of powerful tools, uh, to impose things. Generally speaking, because they can get some percentage people on their side, uh, you know, as long as it's it's their person in charge, they're generally fine with giving that person power. They often lack the foresight to say, well, what happens when the when the next person comes in power? It's not my person anymore. Uh, they they forget that part. Um, but building these tools and making them available is an important check on power, uh, just like the the Second Amendment, it's a check on power in the US. Uh, you know, decentralized messaging apps, encrypted messaging, uh, and and, you know, uh, digital money, uh, in this case, Bitcoin are tools. And this is this goes back to the whole cipher punk era before even Bitcoin, just the the ability to have encryption, uh, these asymmetric, uh, tools. And, um, you know, and back in the '90s, for example, the government, the US government did not like peer-to-peer encryption. They tried to argue that it was basically military arms and that exporting it like violates things and and arrests people. But they were able to, uh, defeat the government by posting open source code in a book and say, well, your other amendment is in the way, First Amendment. And so sometimes David does beat Goliath, and it helps when one, the truth is on their side so that their message is easier to spread, and harder to, you know, claim why it's totally invalid, and two, that it's robust, and that even when it's kind of clamped down on or pushed on the gray market, it still exists as a tool. You know, some governments don't want, uh, certain substances to exist, you know, recreational substances, but they they generally find their way in all these different things. Uh, and the same is true for more virtuous things, things like tools of freedom, where certain governments certainly don't like their existence, uh, or want to regulate their existence, uh, but they find a way because they're well-designed and distributed, and people routinely fall back on them and want them.
So, do you guys, I just curious, do you guys, I think I think we all agree that Bitcoin is an asset that has performed extremely well. It has met and perhaps exceeded many challenges. Um, and it has many attributes as money, right? I I think we all agree with that.
Yeah.
Yeah. Do you guys believe it is going to become an official currency, uh, either the global reserve currency or a globally accepted officially accepted form of money?
I think out of 180 jurisdictions in the world, whatever the number is, yes, there will be some that that do. I mean, the first.
Do you think any major countries? Any major countries will?
Not in the next five years, I would say. Um.
But in 20 years? In 20 years, do you think?
I think when you start talking 20 years, uh, my base case would probably be yes, uh, where I think you can get up this the stack there. Um, I I think that the next step is to basically get as big as gold, right? So Bitcoin is about the tenth of the size of the go of the estimated gold market. Um, that goes back to earlier point that Bitcoin doesn't have to be money to be valuable. Uh, gold is the, you know, the most valuable liquid asset in the world. It's the market, the gold market is bigger than the market for any individual stock. Uh, it's bigger than the the unlevered monetary base of any country. Um, and, uh, so it's it's super valuable for what it is. I think Bitcoin can reach that scale, uh, because it has some pros and cons versus gold, but overall is I I think of similar, uh, utility even without big money. Um, but then also it has certain advantages that enable it to actually function as money, uh, with a full stack of of either, um, uh, custodial or non-custodial ways to to move it around. Uh, and so, you know, we saw El Salvador dabble with it. Uh, now forces above them would would push back on them to varying degrees, but officially, you had Bitcoin touch the status of legal tender. Um, and, uh, you know, there's around the margins, there are jurisdictions that'll say, hey, we can we can accept taxes and Bitcoin. We'll be this little, you know, hub that capital of this place wants to go to. Um, and I I think when you when you look out 5, 10, 20 years, uh, it becomes increasing probable that larger and larger entities will, uh, entertain the idea, especially if they say, well, our competitors are not doing it, because I agree with you that a lot of countries will push back every, you know, every step of the way against that. But then there are other ones that are perhaps maybe a little bit more, um, elegant or saying, you know, we we want to have control, but we can use our, you know, our opponents like, you know, force. We can be a little bit more flexible. So, we give up a little bit of our control to have more control because more capital want to be here. Uh, more people want to be here. Uh, especially the the types of people that we we think are very productive, uh, if you're that government. Uh, and so I do think that there will be some some places that probably just say, "Hey, if you want to pay your taxes in Bitcoin, that's fine." Um, you know, we're going to we're going to make it, you know, not a taxable thing to to move around, uh, and spend, uh, and and, you know, it it starts out with something looks like a city state, and then yeah, could could progress from there.
Just not super not super soon. I'd be first to say I think it's a long time frame. It's not.
It's not next year, probably. It's not, I would say probably not five years for any larger, uh, type of entity, but yeah, when we look out later in our lifetimes, we're talking 20 years. Um, the world's a big place. Uh, and, um, there's kind of an arbitrage there for those willing to take it.
Can I ask one last question? I know you're trying to wrap it up, Mark.
No, go ahead. Make your ask your question. Make your closing argument. Do you guys believe, um, somewhat related to what you're talking about, I mean, generally, uh, at least in the US and and in the Western world for the last, call it, I don't know, 50, 60 years, I I would argue that in some ways, even though the government has maintained control and imposes control, they kind of sort of do it on behalf of an established elite, however, however you want to define that, right? You know, very wealthy individuals will donate to political campaigns, those politicians will get into power, and then they will, you know, impose regulations or rules or whatever it is that tend to benefit, uh, their benefactors, right? Would you guys agree with that or not? Because if not, I'll stop right there.
Yeah, I would agree to enrich the minority control.
Okay, so for the most part.
Do you guys believe that if we move forward in time 15, 20 years, and Bitcoin is now a million dollars rather than $100,000 or what? Pick your number. I I really don't care what the number is, but in more incredible amount of wealth has been created, uh, by those who hold Bitcoin. And as a result, those who have amassed this great wealth start contributing even more to political campaigns than they have in the last few elections. Do you think that the people who currently own Bitcoin are of substantial character and personal, you know, moral fiber that they would not look to have, you know, those politicians put things in place that would benefit them as opposed to the many?
I think on average, I I think there's a, especially in this early case, there's a generally speaking a forward-thinking aspect, uh, statistically to the group, and that they're, you know, if you when you generally pull them, you're probably going to get, uh, more freedom-oriented types of philosophies. Uh, but of course, things change over time, uh, power corrupts, so I certainly think that some of those in power can change their tune, or those that have a politician willing to listen to their power. Um, but power exists in different forms. It could, it's things like mineral rights, or things like, you know, uh, what what favors the industry that they want to operate in. It's not always over the ledger of money itself, especially if they, you know, spent years or decades, uh, you know, you know, going up in Bitcoin. And the fact, the bigger that technology exists. If you mention million-dollar Bitcoin, that's you're basically talking a 20 trillion liquid ledger that exists throughout the world. Um, and that's super powerful, and that's something that it'd be widely known at that point. It'd be, you know, say 20 years from now, it'd be it'd be a 36-year-old asset. It'd be as as old as like, you know, USB or Ethernet or things like that today, and kind of between those two. Uh, it's something that a lot of people just always knew, uh, existed in their lifetimes or conscious lifetimes. Um, and and so it's something that exists and it's powerful. Uh, when it when it's a, you know, billion-dollar network, it can only do so much, but if it's a $2 trillion dollar network, which it, you know, it is now, it can do more. And if it's a 20 trillion or more network, uh, then even those in power that own a lot of Bitcoin and like Bitcoin, uh, even the types of power that they might try to impose through themselves or their politicians, these tools exist, and that, and people can fall back on them and and and push back, uh, should they try to insert it through the monetary channel rather than other channels.
I think to your earlier point, governments have this monopoly on violence, at least for the most part. You know, different different governments are weaker than others. You know, sometimes they have trouble even securing themselves, but, you know, for the most part, they they have at least the the the concentration of power. Uh, and so they have that ability to say, "Okay, here's what we're going to do with our mineral rights," or "here's what we're going to do with our borders," or "here here's certain laws we're going to enforce." Um, which again, subject to the the will of the people and those elites in power that have the resources to shape things. Um, so they they always at least try to air to somewhat toward half-truths or things like that. Um, but it's not always through the monetary channel that they're going to act, especially as technology changes and makes that increasingly hard to do, uh, in a digital age.
Yeah. I think, um, you know, Brent, the it seems like the thread that kind of keeps coming up is you kind of talk about human nature and and willingness to give up power or what they would do to continue to hold on to the power and the human nature side of things. And I think from a, you know, psychological level, human nature level, you're right on all those things. Why would you willingly give up power? I think the difference that I'm hearing from Lynn, and I would agree with, is that it's technology changes things, and it changes their ability to be able to do those things, and could potentially even change the incentive structure around, uh, what they may do into the future, if I maybe have maybe both sides sort of framed up properly.
Got it.
Cool.
Okay. Uh, I mean, that that was great. I loved I loved hearing both your perspectives. I think it was super helpful.
No, this is fun. This is, uh, this is kind of the conversation. You know, it's very hard to do this on Twitter, obviously, right? So, um, doing.
I think we had like over nine, nine or 10,000 people on live watching at some point, so they were obviously liking that as well.
So, um.
I I I appreciate both your perspectives. Uh, Brent, I I I love you make people think. Uh, you push really hard on certain things. Lynn, you, uh, you obviously speak very articulately, and you can back all these things up. So, great perspective. Appreciate both of you guys, uh, taking your time to do this. Like I said, I think it was, uh, great for the community. And, uh, I guess that's it. Thank you.
Thanks for setting this up and running it. See you guys. Thanks. Okay. Bye, guys.